What will be the gating factor in sec finance, the LCR or the Leverage Ratio?

This conversation keeps coming back around and we’re not yet satisfied with the conclusions that we are hearing. Most recently, Fed Governor Jeremy Stein brought it up again. The tricky issue is that, in the category of unintended consequences, the Leverage Ratio (and the Supplemental Leverage Ratio) may do more to stifle securities lending and repo than anyone initially intended. But its not supposed to work like that.